Despite Improvements in MoI's Personnel Systems, Additional Actions Are Needed to Completely ...

46 Pages·2011·2.49 MB·English

OFFICE OF THE SPECIAL INSPECTOR GENERAL FOR AFGHANISTAN RECONSTRUCTION

Despite Improvements in MoI’s Personnel Systems,
Additional Actions Are Needed to Completely Verify
ANP Payroll Costs and Workforce Strength

April 25, 2011
SIGAR Audit-11-10 Security/ ANP Personnel Management Systems
OFFICE OF THE SPECIAL INSPECTOR GENERAL FOR AFGHANISTAN RECONSTRUCTION
April 25, 2011
The Honorable Robert M. Gates
Secretary of Defense
The Honorable Hillary Rodham Clinton
Secretary of State
General John N. Mattis
Commander, U.S. Central Command

The Honorable Karl W. Eikenberry
U.S. Ambassador to Afghanistan
General David H. Petraeus
Commander, U.S. Forces-Afghanistan, and
Commander, International Security Assistance Force
Lieutenant General William B. Caldwell, IV
Commanding General, NATO Training Mission-Afghanistan/
Combined Security Transition Command-Afghanistan
This report discusses the results of an audit by the Office of the Special Inspector General for
Afghanistan Reconstruction (SIGAR) of Afghan National Police (ANP) personnel management systems,
including recruitment, pay and benefits, and force utilization. This report includes one recommendation
to the Department of State and four to the Department of Defense to improve accountability over ANP
workforce strength data, personnel and payroll data and records, and payment and reimbursement of
payroll costs.
A summary of this report is on page ii. SIGAR conducted this performance audit under the authority of
Public Law No. 110-181, as amended, the Inspector General Act of 1978, and the Inspector General
Reform Act of 2008. When preparing the final report, we considered comments from the Combined
Security Transition Command-Afghanistan, the U.S. Embassy in Kabul, and the United Nations
Development Programme. These comments are reproduced in appendices II-IV of this report,
respectively.

Herbert Richardson
Acting Special Inspector General
for Afghanistan Reconstruction
SIGAR Audit-11-10 Security/ANP Personnel Management Systems Page i
SIGAR SIGAR Audit-11-10 April 2011
Despite Improvements in MoI’s Personnel Systems,
Additional Actions Are Needed to Completely Verify ANP

Payroll Costs and Workforce Strength
Special Inspector General for Afghanistan Reconstruction

What SIGAR Reviewed
The Afghan government’s ability to grow and sustain the ANP will depend in large part on the extent to which it has the
management systems and processes in place to track ANP personnel and to account for the ANP payroll, which is
primarily funded by the United States and other international donors. Since 2002, the United States and other
international donors contributed about $1.5 billion to the United Nations Development Programme’s (UNDP) Law and
Order Trust Fund for Afghanistan (LOTFA), which was established primarily to cover payroll costs for the Afghan
National Police (ANP). Current Afghanistan Ministry of Interior (MoI) plans call for an increase in ANP personnel from
81,509 in May 2009 to 134,000 by October 2011. The NATO Training Mission-Afghanistan/Combined Security Transition
Command-Afghanistan (NTM-A/CSTC-A) plays a key role in developing and implementing personnel management
systems and processes to account for the ANP workforce and payroll. This report assesses whether MoI’s (1) personnel
systems accurately account for the ANP workforce; (2) payroll system accurately accounts for the ANP payroll, including
money reimbursed by LOTFA; and (3) personnel and payroll systems will support the ANP and be sustainable. To
accomplish these objectives, SIGAR reviewed and analyzed ANP personnel and payroll systems, records, and oversight
documents and interviewed officials from the Departments of State and Defense, the Afghanistan government, and
UNDP. SIGAR conducted its work in Washington, D.C. and Kabul, Afghanistan, from June 2010 through March 2011, in
accordance with generally accepted government auditing standards.

What SIGAR Found
The MoI is automating its human resource records and developing personnel management systems to improve ANP
accountability. However, the MoI cannot determine the actual number of personnel that work for ANP because it has
been unable to reconcile personnel records or verify data in four different personnel systems and databases. As of
September 30, 2010, the number of ANP records in the different systems, databases, and processes ranged from
111,774 to 125,218. The MoI’s systems and databases contain basic ANP personnel, biometric, identification card, and
registration information. However, these systems and databases are decentralized and the records and data in them
are incomplete, unverified, and unreconciled.
Since 2002, UNDP has disbursed almost $1.26 billion from LOTFA to fund ANP salaries and other costs. Although the
MoI continues to make progress automating the payroll and payment processes, the MoI’s payroll system currently
provides little assurance that only those ANP personnel who work are paid and that LOTFA funds are only used to
reimburse eligible ANP payroll and other costs. As of September 2010, about 21 percent of ANP were still paid by cash
and neither MoI nor UNDP have verified payroll data and cannot confirm that only ANP who work have been paid.
UNDP, as the LOTFA administrator, has overall responsibility for oversight and monitoring of LOTFA funds and the
reimbursement of eligible ANP costs. However, UNDP cannot confirm that LOTFA funds reimbursed only eligible ANP
costs and its reports do not provide sufficient evidence that all audit findings are resolved; thus, additional procedures
are needed to improve the oversight and monitoring of ANP payroll costs and LOTFA funds. Until these issues have
been addressed, there is limited assurance that only ANP personnel who worked received pay and that LOTFA funds
were used to reimburse only eligible ANP costs.
The MoI is developing personnel and payroll systems to support the ANP. Current efforts to account for, automate, and
centralize all personnel and payroll data and records will further aid the sustainment of ANP. However, the MoI will
continue to face challenges gathering personnel and payroll data, centralizing the data within a system, and integrating
into other systems until long-standing issues with security, infrastructure, and coordination are addressed.
What SIGAR Recommends
To improve accountability for ANP personnel and payroll costs, SIGAR is making five recommendations, one to the U.S.
Ambassador to Afghanistan and four to the Commanding General of NTM-A/CSTC-A. These recommendations address
the need to improve UNDP’s administration and oversight of international donations in LOTFA and the MoI’s tracking of
ANP records, personnel, and payroll costs to include eligibility for LOTFA reimbursement. In commenting on a draft of
this report, the U.S. Embassy partially concurred with the recommendation to it and NTM-A/CSTC-A concurred or
partially concurred with the four recommendations to it. Both outlined actions it has taken or plans to take that will
substantially address our concerns. The UNDP also provided comments on a draft of this report.
For more information contact: SIGAR Public Affairs at [phone] or [email protected]
SIGAR Audit-11-10 Security/ANP Personnel Management Systems Page ii
TABLE OF CONTENTS
Background ................................................................................................................................................... 2
MoI Cannot Determine An Accurate Number of ANP Personnel Available for Work .................................. 6
Progress Continues with Development of the MoI Payroll System But This System Still
Provides Little Assurance That Only Persons Who Work for ANP Are Paid, Only
Eligible Costs Are Reimbursed, and That Proper Oversight Is Provided .............................................. 10
The Development and Centralization of Personnel and Payroll Systems Will Continue
To Be At Risk Until Security, Infrastructure, and Coordination Are Improved ..................................... 19
Conclusion ................................................................................................................................................... 21
Recommendations ...................................................................................................................................... 22
Comments ................................................................................................................................................... 23
Appendix I: Scope and Methodology ......................................................................................................... 24
Appendix II: Comments from U.S. Embassy in Kabul ................................................................................. 26
Appendix III: Comments from NTM-A/CSTC-A........................................................................................... 29
Appendix IV: Comments from the United Nations Development Programme ......................................... 33
TABLES
Table 1: Number of ANP Human Resource/Personnel Records as of September 2010 ............................... 7
Table 2: Number of Registered ANP and Status of HRIS database as of September 2010........................... 7
Table 3: Status of Verified Payroll Plan at MoI as of September 2008 and 2010 ....................................... 11
Table 4: Number of ANP Payroll and Personnel Records at Selected Locations for
September 2010 ................................................................................................................................... 12
FIGURES
Figure 1: U.S. and International Donations to LOTFA through September 30, 2010 ................................... 3
Figure 2: LOTFA Disbursements to Reimburse ANP Costs through September 30, 2010 ............................ 5

SIGAR Audit-11-10 Security/ANP Personnel Management Systems Page iii
ACRONYMS
AABIS Afghanistan Automated Biometric Identification System
AFMIS Afghanistan Financial Management Information System
AHRIMS Afghanistan Human Resources Information Management System
ANA Afghan National Army
ANP Afghan National Police
ANSF Afghanistan National Security Forces
DAB Da Afghanistan Bank, Central Bank of Afghanistan
CSTC-A Combined Security Transition Command-Afghanistan
EFT Electronic Funds Transfer
EPS Electronic Payment System
HRIS Human Resources Information System
LOTFA Law and Order Trust Fund for Afghanistan
MoF Ministry of Finance
MoI Ministry of Interior
MoIBC MoI Biometric Center
NATO North Atlantic Treaty Organization
NTM-A NATO Training Mission-Afghanistan
PAI Personnel Asset Inventory
PERSTAT Personnel Statistics report
UNDP United Nations Development Programme

SIGAR Audit-11-10 Security/ANP Personnel Management Systems Page iv
Despite Improvements in MoI’s Personnel Systems, Additional Actions Are
Needed to Completely Verify ANP Payroll Costs and Workforce Strength
A primary objective of the United States, the international community, and the Government of
Afghanistan is the development of an Afghan National Police (ANP) force capable of protecting Afghan
citizens and upholding the rule of law across the country. Current plans call for increasing the number
of ANP personnel from 81,509 in May of 2009 to 134,000 by October 2011. The Afghan government’s
ability to grow and sustain the ANP will depend in large part on the extent to which it has the
management systems and processes in place to track ANP personnel and to account for the ANP payroll,
which is primarily funded by the United States and other international donors.
The government of Afghanistan does not have the financial resources to sustain ANP salaries and other
related costs at either the current or projected levels. The United States, in partnership with the
international community and the Afghan government, has supported the development and
maintenance of multiple management systems to keep track of ANP personnel and salary
disbursements. Since 2002, the international community has contributed about $1.5 billion to the Law
and Order Trust Fund for Afghanistan (LOTFA), which is administered by the United Nations
Development Programme (UNDP), to fund recurrent ANP costs — primarily salaries, allowances, and
benefits.
We initiated this audit to determine the extent to which the Afghan government has the personnel
management systems and processes it needs to effectively and efficiently support an independent and
accountable police force. This report assesses whether the MoI’s 1) personnel systems accurately
account for the ANP workforce, 2) payroll system accurately accounts for the ANP payroll, including
money disbursed by LOTFA, and 3) personnel and payroll systems will support the ANP and be
sustainable.
To meet these objectives, we collected and analyzed personnel and payroll data, records, and
monitoring and oversight documents. We also examined various MoI personnel and payroll systems,
databases, and processes. In addition, we interviewed officials from the U.S. Embassy in Afghanistan;
the Department of State’s Bureau for International Narcotics and Law Enforcement Affairs; the
Department of Defense’s Office of the Secretary of Defense; the International Security Assistance Force
Joint Command; North Atlantic Treaty Organization (NATO) Mission Training-Afghanistan/Combined
Security Training Command-Afghanistan (NTM-A/CSTC-A); United Nations Development Programme
(UNDP); Afghanistan Ministries of Interior (MoI) and Finance (MoF); and contractors supporting these
systems. We conducted our work in Washington, D.C. and Kabul, Afghanistan, from June 2010 to March
2011, in accordance with generally accepted government auditing standards. A discussion of our scope
and methodology is included in appendix I.
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BACKGROUND
The U.S. strategy for Afghanistan emphasizes building Afghanistan National Security Forces (ANSF)
capable of independently providing for the internal and external security of Afghanistan. More than half
of the $56 billion that Congress has appropriated since 2002 for the reconstruction of Afghanistan —
approximately $29.3 billion — is for the development of the Afghan National Army (ANA) and the
Afghan National Police (ANP). Approximately one-third of the U.S. investment in the ANSF goes to
training, equipping, housing, and sustaining the ANP. Current ANSF development plans call for the ANP
to grow to 134,000 personnel by October 2011.
In April 2009, the Department of Defense reported to Congress that establishing personnel management
systems and processes is critical to building sustainable ANSF.1 Multiple stakeholders — the UNDP and
international donors, the MoI, the MoF, and NTM-A/CSTC-A — play a role in developing and
implementing personnel management systems and processes to account for the ANP workforce and
payroll.
The government of Afghanistan does not have the financial resources to sustain ANP salaries and other
related costs at either the current or projected levels. In 2002, the Government of Afghanistan and its
international partners agreed to establish LOTFA to support the development of the ANP by covering
certain recurrent costs, including the payment of police salaries, allowances, and benefits nationwide.
The United States has historically been the largest single contributor to LOTFA, providing nearly
32 percent of total contributions. U.S. funding for LOTFA has come primarily from the Department of
Defense’s Afghanistan Security Forces Fund and the Department of State’s International Narcotics and
Law Enforcement Fund. Since 2002, the U.S. and other international donors have contributed about
$1.5 billion to LOTFA over five phases. Donations from the international community were almost
$1.4 billion through September 30, 2010, (see figure 1 below) and the United States donated an
additional $104.48 million in October 2010. Most of this money has gone to pay ANP salaries.

1 United States Plan for Sustaining the Afghan National Security Forces, April 2009 Report to Congress in
accordance with the National Defense Authorization Act of 2008 (Section 1231, Public Law 110-181).
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Figure 1: U.S. and International Donations to LOTFA through September 30, 2010
Donations total $1.4 billion
350,000,000
300,000,000
250,000,000
Other ($215.3 million)
200,000,000
Canada/CIDA ($79.6 million)
150,000,000
100,000,000 Japan ($324.6 million)
50,000,000
European Commission ($334.8
- million)
USA ($441.1 million)

Source: SIGAR analysis of UNDP’s quarterly and annual LOTFA reports.
Note: Numbers affected by rounding.
The MoI has authority over the ANP, including the Afghan Uniformed Police, Afghan Border Police,
Afghan National Civil Order Police, and other uniformed enablers (including intelligence, anti-crime,
counter narcotics, traffic, medical, and fire). The United States has been assisting the MoI to develop
new management systems and to strengthen existing systems. The MoI is currently using four systems
and processes to report on ANP personnel (numbers 1 – 4 below) and one system to account for ANP
payroll (number 5 below):
1. Manual personnel records: The MoI maintains paper records for each ANP member as assigned
by region, province, district, and individual unit. These records are maintained at MoI
headquarters for officers (including sergeants) and at the provincial level for all patrolmen. The
MoI submits a monthly report on the total number of ANP personnel to the UNDP to use for its
monthly payroll report.
2. Identification card/registration database: The United States is funding a contract to assist the
MoI in maintaining a separate ANP identification card/registration database.
3. Personnel Statistics reports (PERSTAT): The MoI manually reports the total number of ANP
authorized (tashkil)2 and assigned to each region, province, district and unit by ANP component,
ANP workforce strength, and ANP not authorized to be funded by international contributions
(non-tashkil). These reports are prepared by hand and reported monthly.

2 MoI prepares an organizational document called the tashkil, which dictates force structure, personnel strength,
and mission descriptions for the ANP that are funded through LOTFA by international donations.
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4. Afghanistan Automated Biometric Identification System (AABIS): The United States has a
contract to assist the Afghan government in collecting and managing the biometric data for all
of the ANSF.
5. The Electronic Payroll System (EPS): UNDP created and maintains EPS, the MoI’s payroll system.
The MoI uses manual time and attendance records to process monthly payroll in each of
161 stand-alone EPS. The MoI submits the EPS-processed payroll information to the MoF, which
is responsible for managing all Afghanistan ministry financial transactions, including the
payment of salaries. The MoF records the EPS information provided by the MoI into the
Afghanistan Financial Management Information System (AFMIS), which is the country’s
government-wide accounting system.
The MoF provides a budget to MoI for all operating expenses, including ANP payroll and other costs.
The UNDP uses the international contributions to LOTFA to reimburse the MoF for ANP payroll and
other costs that are eligible under the LOTFA agreements. The UNDP is responsible for the
administration and oversight of LOTFA. As of September 2008, the LOTFA agreements stipulate that the
UNDP will also contract with a monitoring agent to perform monthly audits of the ANP payroll.
LOTFA provides the majority of funds used to reimburse ANP police salaries, benefits, and other
compensation. From 2002 through September 30, 2010, LOTFA disbursed about $1.26 billion to
reimburse MoF for ANP costs; more than 91 percent of this amount was for police salaries, food
allowances, and other pay (see figure 2 below).
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Figure 2: LOTFA Disbursements to Reimburse ANP Costs through September 30, 2010
Disbursements Total About $1.26 Billion
$16.5 million or 1%
$42.4 million or 4%
$50.4 million or 4%
Police Remuneration
UNDP Fee
Construction
$1.15 billion or 91%
Other

Source: UNDP’s quarterly and annual LOTFA reports.
Note: Numbers affected by rounding.
The MoF uses four mechanisms to pay ANP personnel. The first two are the electronic payment
processes and the last two are the manual cash payment processes:
1. Electronic Funds Transfer (EFT): The MoF processes the payment in AFMIS and the funds are
transferred from the Central Bank of Afghanistan (Da Afghanistan Bank or DAB) to an
individual’s commercial bank account electronically. Typically this is through Kabul Bank, which
has the largest number of satellite branches. EFTs have two advantages. First, they eliminate
the potential for skimming by superiors. Second, because they require an individual to collect
his/her salary, they reduce payments to ghost employees.
2. Cell Phone or M-Paisa Mobile Salary Disbursement Scheme: In July 2009, the Afghan
government started a pilot program that remains currently underway for mobile banking in the
Wardak and Khost Provinces. The objective is to create an alternative to an EFT in places where
an EFT is not available, such as in remote areas where there is no banking network.
3. Pay by List: In areas where there is no commercial bank, employees can be paid through DAB,
which does not service individual accounts. Rather, it pays each individual where there is DAB
and no commercial bank per a prepared list of identified ANP employees.
4. Trusted Agent: A government employee picks up the payroll from either DAB or Kabul Bank or
other commercial bank with funds transferred from DAB (similar to EFT and cell phone
payments). The unit commander, or other trusted agent, makes payment to the individual
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